Whatever you do, do not move to New York State; you will hate the laws here, as I do.
Stick the cork back in the bottle, indeed. We are lucky the laws allow restaurants to take the cork out of a bottle.
We are still fighting the fight for wine in grocery stores (which distributors are against). I swear, I do not understand why ALL California restaurants don't try to capitalize from the on-premise/off-premise laws. I mean, you taste a wine at dinner, and you like it, why aren't you encouraged to take a bottle home with you? Are they afraid the retail price will give away their at-table
mark up policy?

There used to be a restaurant in Riverside, California, called Pitruzello's. Joe Pitruzello sold more wine out of his restaurant at that time (25 years ago) than any retailer in the county.

He only "sold" at lunch when people were doing business (didn't want to intrude on family or date dining at night). He'd have wines of the month, week and day...with an unopened bottle sitting on every table.

He'd offer tastes (illegal in California then and now...but he got away with it), usually selling the bottle. Then after the client said they liked the wine, Joe would say we've got a real special on that today.

Joe would take a wine that wholesaled for $6 and that would have retailed with full mark-up for $9, and that he was charging $12 for in the restaurant...and tell the guy he could have a case for $120 (while the guy is doing math in his head and figuring out that he had just paid the equivalent of $144 the case), Joe would then add..."And we can put it right on your lunch tab and have the boy put it in your trunk."

Now the guy is thinking...this will go on my credit card, for which I'll get reimbursed on my expense account...I'll give my client/guest a couple of the bottles...and I'll get home with nearly a case for free.

Joe sold a ton of wine.

What happened? His son took over and was too much a pure foodie to be on the floor hustling wine sales. The third generation restaurant ended up folding.

Great story, Curmdugeon! What do you think of retail/restaurants like the Wine Cask in Santa Barbara? Attended a lunch there last year, and thought their prices (both sides) were quite decent for the high level of food and service they offer. Wish this was possible in Hawaii. Actually, one type of dream restaurant that I always envisioned is a place where people would go through a line cafeteria style, but the food would be incredible -- by trained, adventurous chefs -- and at the end, of course, there would be a short but sweet selection of great wines sold at retail. Low labor and modest but comfortable setting would make the food prices 20%-35% lower than normal fine dining venues. There'd even be additional senior citizen, early bird, and X-Gen discount hours (the X-ers' time, of course, would be after 10 p.m.). If I have the energy, I'll do this when I retire.

How about having a restaurant with retail wine shop attached. No wine list...you pick out your wines in the shop and pay a $10 corkage fee in addition to whatever the wine shop retail is (I'd suggest a full 50% mark-up...33 1/3% on sell). So on a $45 retail wine, for which the customer would happily pay $55, and that wholesales (before any volume discounts) for $30...the restaurateur banks a $25 bill (plus quantity discounts and/or post-offs). What's wrong with that for pulling a cork and providing a glass?

And making $13-$14 on a $10 bottle that would be $20 with corkage should make everyone happy too.

And with case sales of wines customers end up liking would make up for some of the missing mark-up.

Restaurants should never forget it's dollars that go in the bank...not percentage.

Thirty-plus years ago, Ken Burnap (Santa Cruz Mountain Vineyard) had an Orange County, CA restaurant called The Hobbit with a then unique concept.

About 60 seats in an old Spanish style hacienda. Prix fixe menu...nine small courses (long before prix fixe was fashionable)...and you entered through the back door to the restaurant's cellar.

You were greeted with a glass of comp champagne and the first course was stand-up finger food in the wine cellar with maybe 200 selections. Each person was handed a calligraphy look menu and had 20-30 minutes in the cellar to select the wines to accompany the menu. There were one or more sommeliers to assist you.

As you made your selections, your name would be written on your bottle. Whites or sparklings were instantly placed in a giant vat of ice and water to chill...reds were opened if needed, and or decanted if necessary.

Someone rang a little chime and everyone went upstairs to their table. Your wines then appeared with appropriate stemware to accompany the courses you planned them for.

Most people would buy two wines...one white for the courses before intermission (after first five courses) and a red for the final four courses. The geeks of course came in parties of 4,6,8 or more and ordered multiple bottles.

Place started out opening only two nights a week and ended up being open 6 nights. For years it was booked weeks and months in advance. Wine prices were roughly twice wholesale and because Burnap was a wine lover himself included everything from offbeat wines to First Growth Bordeaux. I learned about many small California wineries I didn't even know existed at the time.

No need to apologize Curm. I know I love your stories and the restaurants you talk about are unique....maybe it will inspire someone. What happened to all of these places?? Just a change of trends or did they go out for financial reasons?? I realize one can often lead to the other.

Re The Hobbit...I think it's still there, albeit with a different format.

Burnap had to sell out when he started his winery because of a crazy California law that says you can't own a license for a 2000 case winery and a wine license for a 60 seat restaurant. (Of course if you are a giant corporation which owns a huge winery and a hotel or restaurant chain, you can pay of the politicians and get a special waiver to hold both licenses.) His chef partner kept it going with the same basic concept for many years.

The chef then sold to a son. By then trends were moving away from four-hour dining experiences and the younger proprietor wanted to do table-turns and sell more wine. Even got a liquor license and started doing cocktails.

I don't know what the wine mark-ups are these days...haven't been there in more than ten years.

Sometimes I think it's better for things to remain memories. Times change, reality sets in. With all due respect, it's very difficult for me to accept the idea that it's dollars, not percentages, that go into the bank. The reality is that percentages always take precedence over dollars because whether you're doing half-mil a year or 6 mil, if you're not meeting your costs by managing your percentages (first!), you're just spinning your wheels. What's the sense of doing 6 million a year when it cost 6.5 to operate? The ugly part is that when you're at that level, you definitely have to cater to more than just wine aficionados. Which is why, I would guess, successful, long-running places like The Hobbit (I'm only using it as an example) are likely to remain small -- very small.

Getting back to the retail store/restaurant connection in my dream restaurant: I agree. I've always thought that a modest, fairly low inventory retail store would be appropriate within this cutting-edge cafeteria style restaurant concept. A big inventory (which to me is anything over $25,000 cost) would defeat the purpose of my low-frills/high quality scheme.

Last month I visited this incredible store in Sarasota, Florida (the name escapes me, since at the time they were in the midst of a name change) which had this extraordinary retail selection (put together, I believe, partly by an ex-Emeril's sommelier) of all the most cutting-edge wines today (Dalla Valle, Ridge-Monte Bello, Gaja, Colin-Deleger, Beaux Freres, Sassicaia, and anything Larry Stone, Gambero Rosso, or Tanzer might like). But when I drove up -- at about 10:30 p.m. on a weekday -- I couldn't believe that I had found the right place. There were so many beautiful people -- 20s up to mid-30s, very hip yet professional looking -- just hanging out on a front deck spilling out from a packed, bar type scene. I found that the store occupied half the space, and that you could buy the wines retail and then drink them for a modest corkage ($10 I believe) right on the premises. So, Curmudgeon, it definitely could still work today -- younger wine lovers are most definitely interested! If not for food, at least for a chance to just hang out and, well, be cool. I'll call a friend to get the name of the place, unless anyone listening already knows it.

Don't know the place, perhaps Rick does since he is part of the Sarasota scene.
There was a place in Toas that did a similar thing. They had a gourmet deli/retail business. Offered a full bar, offered flights all day every day and for those who wanted to do sight seeing, offered really nice picnic things. Wonderful assortment of cheeses, meats, etc with nice breads and desserts. They of course would assist you with the choice of wine to match what you had picked out. Great wine selection...wine spectator award I think. Not fancy, but it was a popular place. They were not a evening hot spot however, closed at nine.

Randy...My point about dollars over percentage is this...Is it not better to put $10, $15 or $25 profit in your bank account from a wine sale, even if it is only 100% mark-up (50% on sell), than to make 700% on a glass of iced tea and put $1.50 in the bank?

What good to take a traditional mark-up on an expensive wine and not sell any...or sell very little...where a closer to retail price would motivate more sales (and more dollars if less percentage) in the higher price categories and fewer at the low end...AND fewer iced teas and beers.

Randy, the place in Sarasota you were refering to is JD Fords wine shop & tasting room - the man who owns this also owns the soon to be gourmet market across the street, clever concept that has been recieved very well by "the beautiful" people of Sarasota. The pate's & such will come off the gourmet markets shelves.....
back to your comments... you are correct, times change - attitudes change, etc..
Perhaps in larger markets the prixe fix menus can survive (trotters - chicago) , but this is a concept that does not appeal to the masses, certainly not in the unadventurous markets (like west Fl.).

W.C., as an independant - i subscribe to the dollars over percentages theory... no doubt dollars make my payroll. However, I have many years experience in the corporate (hotel) f&b business, where I was judged primarily on my percentages... percentages were more important than profit dollars in many cases where growth or market share are concerned... it really depends on the environment & parameters you work within.

This is a gargantuan subject - with too many variables attributed to it. We all know of successful restaurant business models built on all sides of this spectrum ( I know a few gaugers doing quite well for now)

Maybe we should discuss specific issues on his topic....or....not
Nancy, see what you started??!!!!

Randy , thanks for lending your comments here. I like how you defend your principles without alienating your customers...thats a rare talent in our business

Mahalo, Rick. I noticed the area cleared across the street in Sarasota. Looks like some smart people working it. I wish them luck if they expand into full foodservice. All I can is that you gots to be good; otherwise, you're better off sticking to what you can do.

Curmudgeon, there's no question in my limited mind that it's way better to sell wine than coffee, tea, or cocktails (although the folks at Starbucks could probably put up an unbeatable argument). Wine does indeed get you the dollars. The point of contention, however, is that wine must be sold by a percentage that is in sync with your overall concept. If you're a casual, no b.s., low overhead, small place -- where you not only cook, but also serve and answer the phone -- your cost percentage obviously can be very high (50% or more!). I've certainly seen it done quite well (most recently in a couple first class places in Scottsdale, AZ called Roaring Fork and Pinot Grill).

But if you're a more extravagant, labor intensive place (especially if you're into relentlessly detailed service and intricate French style cooking), then you'd be a fool if you didn't manage your wine prices by towing the percentage lines (i.e. 30% food cost, 28% labor, 35% wine, et al.). If these things aren't monitored almost daily, you're dead meat. You'll end up, as I said, transmitting 12 thousand to the bank at the end of each night, but owing 13 at the start of each day.

The point is, marking wine up by percentage scheme is not such not a bad thing. It's the necessary thing for most operations. The smart thing to do, of course, is to sell as low as possible in order to build your customer base and be as competitive as possible; but only up to the point where you aren't losing your shirt -- a point of resistance which a smart restaurateur can reduce to some kind of percentage.

I also agree, Rick and Curmdudgeon, that most hotels (and most restaurants, I guess) are pretty dumb when it comes to merchandising by price. It's dumb to sell, say, only one bottle of Caymus Cabernet for $75 when you can sell two if you mark it up to only $55 apiece; or else take the pricey Caymus off the list altogether, and go with a just-as-good Justin Cabernet which you can sell quite profitably for just $35, while promoting good taste and customer relations. It's also dumb to sell three bottles of Napa Ridge Cabernet for just $12 when you can just as easily sell the same three for $19 (in fact, many wines seem to appeal more to guests when they're marked up a little higher). Being a slave to percentages, in other words, is just plain dumbness. But not paying attention at all to percentages is also the quickest way out of Dodge.

Finally, guys, I certainly hope that the prix fixe -- actually, many places now call them degustations, or "tasting menus" (sounds more upscale) -- does come back. We've been trying them -- five or six course complete menus paired with five or six specific wines -- on top of our regular menus. Another extremely talented chef opened up in Honolulu recently (Chef Mavro's), and he has no wine list -- just four prix fixe menus everyday, with specific wines by the glass chosen for each course in each menu. The chef either deliberately tailors his dishes to the wines, or vice versa. So you always get a decent match! (Of course, you can always mix 'n match, which someone like me can never resist doing).

I remember a restaurant in Seattle about ten years back, maybe more, called Enoteca. It included a retail shop. You bought the wine from the retail shop and paid $5 for corkage at the table, for any wine. They also had a wine-by-the-glass bar so that those who didn't want to dine could first taste what the retail shop had on special that week.

Now charging me $6.50 for a glass of $7.50 a bottle retail wine is profitable, while charging $85 for a $60 bottle of Sans Cervelle is cool but way past being my dinner beverage of choice. In my side business, if I do not mark up 3 times what I paid for an object I do not make money. As far as I know this is true in all businesses dealing in tangible objects. In a restaurant (especially here in Monterey, CA, where lettuce retails at 39 to 59 cents a head year round) putting 25 cents worth of ingredients and 1 minute of time into a salad and charging $6.50 is a profitable move. A plate of pasta that does not contain both lobster and truffle does not cost more than $2, so charging $12-$18 will generate a profit. Selling a $20 bottle for $55 does generate even more profit dollar wise but is not as profitable as the salad in the long run. Unless everybody buys wine. Which is the crux of this discussion, I believe. People who don't cook do not know the costs of food, and you do have to pay for the artistry of the chef, the dish washer, and all the other costs of doing business, we all understand that when we go out to eat. But Joe Six Pack saw the Beringer's end rack at the Safeway when he was waiting to check out. He now knows it retails for under $10 and a restaurant charging $30+ for the same bottle is something he can understand, he understands it is way too profitable for his blood, he'll have coffee, thank you.

Well, here's the sad-but-true story of it: The restaurant business is indeed like any other, except far more labor intensive.

It is, in fact, especially more labor intensive than retail. So if Joe Six-Pack, for instance, gets hired to open a bottle of wine, do you think he's going to do it for peanuts? No way.

Let's look at it another way: If you not only bought a bottle of Beringer Chard in a store, and then went home where someone parked your car, some others cooked and washed your dirty dishes, and of course, you have a specially trained butler to open and serve that dag-durned $10 bottle -- you think you're getting that experience for $10? No, it means you're one rich, silly hombre, who can afford to pay considerably more... voluntarily.

THAT'S what the restaurant business is all about, and even Joe Six-Pack knows it.

Here's another sad-but-true story: Say, a restaurant has a bottle of wine that costs $10 wholesale, and a salad that costs just $2 in fresh ingredients. If, in order to meet their overhead, they have a choice of selling the wine for $30 and the salad for $6, or selling the wine for just $22 and the salad for $9 -- which route would they normally take? Most places would take the latter -- sell the salad for less and the wine for more. Why? Because a cheaper salad will attract more customers than a cheaper wine.

The day, however, when wine becomes nearly as important to the restaurant business as food, this may change. So far, this happens only in specialty wine bars and in some of those savvy wine-oriented retail/restaurant combinations we've been talking about. But the reality is that there are only so many wine crazy customers to go around as of yet, and so in the meantime the majority of restaurateurs will have to struggle along with these types of hard choices -- cheaper wine, or cheaper salads.

So, the answer to high wine prices in restaurants is that to bring the prices down, we need to make daily wine consumers out of Americans. And boy, is that proving a daunting task.
Let's hope Gillespie's project in Albany, NY (that other wine state) and Houston, TX (that other, other wine state) prove successful and that consumers let producers know what they need to know to reach more people.
Until then, I suppose if you want a great, or even good, bottle of wine with dinner, and afford it too, stay home.
A terrible, but unfortunately, real situation.
Randy, you have kind of said that dining out is for a certain income-class of people, which is likely why America has so much in the way of fast (so-called) food across its landscape. What we need is what you find in McD in Europe -- 375 ml bottles of wine with our hamburger and fries.